Debt Relief News

The credit card companies have been able to run carte blanche on consumers, slashing their credit lines for the lamest reasons. Mine have been repeatedly slashed because my creditors claim I have “seriously delinquent accounts”. These “seriously delinquent accounts” to which they are referring are ones that are 4.5 years old or older. Three of them are due to fall off my credit reports THIS YEAR due to age. I have one that drops off in May of this year, one in July and one in November. But, yet, the creditors are allowed to continue to punish me for these past financial problems that were actually a result of identity theft. Credit card companies REALLY need to be monitored, and now they are on the radar screen. Now, that it has happened to someone who is high-profile enough to have drawn attention, it will be interesting to see if these practices stop.  The Debt Settlement Nationwide Blog, recently posted some similar comments.  Read the complete Debt Article> Noteworthy Credit Related News

Wondered why do we ever need credit cards? To your surprise, you actually need to have a credit card these days.  But you do NOT need credit card debt. As Suze Orman explains, Credit card debt continues to rise, but we live in a credit era that is automated and not having a credit card will limit some your opportunities.  If you have over $10,000 in credit card debt consider a debt consolidation loan or debt settlement.

It’s no coincidence that according to the Federal Reserve’s latest survey 46.2% of American families are holding credit card debt and are now in search of debt relief. Credit card companies have made a multi-billion dollar industry out of knowing how consumers think and by predicting the average consumer’s habits.

Here are a few things that banks know that credit card consumers are sometimes in the dark about:

- Possibilities for Problems in the Economy. Many credit card companies have entire teams dedicated to researching the economy and predicting possible economic issues that would cause consumers to use their credit cards more frequently. It is no coincidence that at a time when many people believe that the American economy has hit a recession due to increases in the price of oil, food, and other everyday necessities, the credit card industry is banking more and more interest due to an increase in the daily use of credit cards.

- 0% APR Offers Lure You to Spend More, Thus Owe More. A few years back, credit card companies began sending out numerous 0% APR offers to convince credit card holders at other banks to transfer their balances. While many people took advantage of these 0% offers to save money and pay off debt, they may not have taken into account the fact that by helping to free up money on their credit card accounts, these credit card companies were actually creating somewhat of a trap. If a consumer who is trying to pay off credit cards decides to use the new 0% APR credit card after a certain period of time (even if the 0% balance transfer APR is in effect for the life of the debt), the interest rate on that new purchase balance can shoot up to 18% or more, and is paid off last. That means that 10, 15, or 30 years down the line when the 0% balance is finally paid off, the amount you purchased on the card at 18% has been accruing in interest for all of that time as well. You may find yourself in the same boat as before!

- “Rewarding” You With a Higher Credit Limit Keeps You Hooked. Credit card companies frequently “reward” good customers who pay their bill in full faithfully every month by increasing their credit card limits. But in actuality, they know that as long as your limit continues to rise, you are likely to use the card even more. At some point in that pattern of behavior, you will reach a peak where the credit card company will no longer raise the limit and is profiting from the higher finance charges on your credit card bills. It’s all about predicting the consumer’s behavior.

- Your Past History Predicts the Future. Another bit of invaluable knowledge that credit card companies benefit from is your full credit card history. They have a detailed history of your past purchasing habits, balances, and what you have done in certain situations that have arisen in your financial history. What you have done in the past is a good predictor of your future actions. For example, maybe you started a business and used your credit card to purchase $1,000 in business equipment one month. Now your creditor knows that you are more likely to use your card for both personal and business purposes. In another example, if a creditor sees that you have a penchant for expensive designer clothing, they will not only assume that you will purchase more in the future, but also send you special offers in the mail for designer clothing from its advertising partners.

- Consumers Don’t Always Read the Fine Print. Creditors also bet on the belief that most credit card consumers are too lazy to read the fine print of their credit card bills and agreements. If a credit card customer continues to pay the minimum payment, not knowing what the APR is, and not knowing how payments are applied, they can become trapped in a long cycle where they will pay off credit cards for an extended period of time. Meanwhile, the creditor will continue to reap the benefits of the consumer’s lack of knowledge for a long time to come.  Read the entire debt article.

According to the Federal Reserve, nearly half of American families do. Credit card defaults to reach 100 Billion dollars in 2009.  The report indicated thatnearly half of American families also have some sort of bank savings accounts.

The next crisis will be credit card defaults by the millions of unemployed. Further exacerbating the crisis and leading us closer to another Great Depression.

In a recent article, Jason Cardiff discusses the impact of bad debts and defaulting mortgage securities being bought by the Federal Reserve and the US Treasury. He offered options to deal with bad credit mortgages and other poor performing assets held by financial institutions.  In addition, Bernanke suggested the government increase their intervention to slow down the foreclosure crisis as the housing market continues to sour.

The Federal Reserve chairman, Ben Bernanke talks about that the $800 billion recovery plan, a combination of tax cuts and increased government spending is now being massaged by the Obama team and the Democrat-controlled Congress could provide a “significant boost” to the floundering economy. He did however; reiterate that such a plan must be part of a broader, multi-pronged government response to fight the worst financial and housing crisis the hit the U.S. and the global economy since the Great Depression in the 1930s.  “Fiscal policy can stimulate economic activity, but a sustained recovery will also require a comprehensive plan to stabilize the financial system and restore normal flows of credit,” Bernanke said.

To help on that front, the Federal Reserve has agreed to lend billions to credit card finance and mortgage companies and purchasing some of these companies’ debt to rebuild the credit markets. The US Treasury Department is overseeing a $700 financial bailout program that has pledged to inject $250 billion into banks in return for partial government ownership.   Bernanke said “more capital injections and guarantees may become necessary” to stabilize financial systems markets while stimulating credit markets that should increase consumer lending. Visit Jason Cardiff Tips online for financing newsletters, real estate articles and debt relief reports at no cost.  Read the original article > Fed Chief Says Obama Stimulus Could Revive Economy and Housing Markets.

In a recent CNN program, Lou Dobbs says, “I Told U So” to Secretary Paulson.

The Association of Settlement Companies (TASC), a non-profit organization that promotes fair business practices, consumer protection and high industry standards for the debt-settlement industry, served as a featured presenter at the Federal Trade Commission’s workshop examining the debt-settlement industry on Sept. 25, 2008, in Washington D.C.

At the workshop, Wesley Young, the panelist representing TASC, discussed consumer protection challenges for debt settlement. Alongside four fellow panelists, Young fielded questions and engaged in discussions led by an FTC moderator. The panel also analyzed a mock advertisement to discuss ethical advertising to consumers by debt-settlement companies.

“The FTC workshop facilitated collaboration between the debt-settlement industry, creditors, legislators, and consumer protection groups,” said Young, TASC executive board member and legislative director, and general counsel for Debt Settlement America. “TASC plans to continue to work alongside these groups to help consumers distinguish reputable debt-settlement companies from the bad apples in the industry. TASC supports debt settlement as a positive, viable bankruptcy alternative for indebted consumers to consider as a debt-relief option.”

During his opening statement at the FTC workshop, Young shared results of a survey commissioned by TASC member company Nationwide Support Services, headquartered in Irvine, Calif. The survey, conducted by a third-party company, was targeted at approximately 1,500 customers who had completed debt settlement programs administered by Nationwide Support Services. Approximately 10 % of those consumers responded.

The survey concluded the following feedback from past debt settlement customers:

– 91 % would recommend debt settlement as a debt-relief solution

– 80 % described their overall experience with debt settlement as “excellent” or “good”

– 75 % were not interested in purchasing a guaranteed credit card in the future

– 51 % saved between $10,000 and $40,000 on the original amount of debt they owed

– 47 % were able to complete the program and pay off their debts within 13 to 24 months

“TASC found these results very encouraging and helpful to share as an example of the benefits of debt settlement to consumers and the impact of implementing TASC’s best practices in operating a debt-settlement company,” Young said.  Nationwide Support Services expects to continue to survey customers for the next two years, also studying the effects on participants’ credit scores, spending habits and personal-finance behaviors after completion of a debt-settlement program.

Today, TASC’s 171 members include debt-settlement companies, industry vendors and law firms. TASC protects the rights of consumers through member certification programs and consumer education on debt settlement to provide consumers confidence in partnering with its members. TASC expects the FTC to develop a summary of its findings from the workshop within the next few months.

About TASC Member Nationwide Support Services

Nationwide Support Services (NWSS) is one of the oldest and largest debt settlement processing companies. It provides debt negotiation and customer support to independent sales offices throughout the United States. Additional information can be found at www.nationwidesupportservices.com.

About The Association of Settlement Companies (TASC)

The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit http://www.tascsite.org. SOURCE: The Association of Settlement Companies